Sunday, October 26, 2008

Leverage This

Those pesky Credit Default Swaps (CDS), which have turned a housing boom/bust cycle into a full blown global financial meltdown, are even worse than I thought.

It was 2 years ago, upon reading a lot about Wall Street's and insurance company's invention of CDS's, derivatives, their connection to the housing boom/mortgages, and their potential disastrous consequences, that I decided to move pretty much out of stocks. I was a year early, and missed out on some big gains, but also some big losses. It was one of my luckier market timing moves, and it almost makes up for all my typically terrible stock market timing moves earlier in life. I am VERY SLOWLY moving a little cash back into equities, but today I read this:

Unbelievably, CDS's were also set up to insure the debt of ENTIRE NATIONS.

This is not good. Not good at all. Talk about a domino effect... Goodbye to some insurance companies, goodbye to some sovereign nations' finances. Goodbye totally leveraged global financial house of cards. It was fun while it lasted.

The weather in Hood River, however, continues to be fantastic, fun, and lasting. Perfect for leveraging these warm days, cool nights, and great Fall colors into some great outdoor activities!

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